GE Money announced that furniture retailers can visit its online Business Center to help its partners understand changes in government regulations on credit to provide tools to ensure compliance.
For furnishings retailers, staying informed on and compliant with the new regulations impacting credit in 2010 is vital as providing financing options continues to play an important role in strong business management and sales growth. OVERVIEW of the Credit Card Accountability, Responsibility and Disclosure Act
In May 2009, President Obama signed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. This legislation contains a series of major new regulations governing credit cards, and affecting the availability of credit and how it can be offered to consumers.
GE Money, one of the nation’s leading providers of consumer credit, has a dedicated team of experts who continue to carefully review the regulations and integrate them into its range of financial offerings.
WHY the government is driving these changes
The Credit CARD Act is designed to provide new consumer protections for credit card holders and strives for more clarity and consistency to consumers. The new law is an important step in protecting consumers and one that fits GE Money’s business customer centric philosophy.
Throughout our research efforts, consumers have told us they continue to view credit as a valuable tool for managing finances and are still seeking flexible payment options.
WHEN the Credit CARD Act will take effect
Some of these new regulations have already been enacted in 2009, while others go into effect at different times between now and August 2010. The majority of provisions take effect this month, including guidelines impacting the types of promotional financing offered.
HOW government regulations will affect promotional financing and the Home Furnishings market
In accordance with the new Credit CARD Act regulations, revolving promotions that are less than six months in duration (i.e., “90 Day” promotions) will no longer be allowed as of February 2010. Additionally, the Office of Thrift Supervision (OTS) has instituted guidelines that also impact promotional financing, and as a result revolving promotions that do not require a minimum payment (i.e., “No Pay” promotions) will also no longer be allowed as of February 2010.
While these types of promotions have been attractive for consumers, there are a variety of GE Money “with payment” promotions available today. Additionally, GE Money is driving new product development efforts designed to identify and introduce a number of appealing promotions to help replace no-pay plans and meet the current consumer credit trends. Our newest promotion offers no interest financing for up to six months, which is certain to be popular with homeowners who want the predictability of structured payments.
WHAT this means for the future of promotional credit
Research indicates that consumers may have less access to credit, and will seek promotional financing as a way to structure their budget and to make a purchase affordable with predictable payments over time. Promotional financing in the form of deferred interest terms and extended payment programs will continue to be a valuable tool to help consumers get the products they need. Businesses who offer promotional credit will continue to enjoy a competitive advantage and higher customer satisfaction.
WHO these changes impact
The Credit CARD Act affects financial institutions and businesses that offer revolving credit programs, as well as consumers who utilize them.
WHERE furniture retailers can find resources
As a leader in the financing industry for over 70 years, GE Money remains dedicated to serving the Home Furnishings market for the long term and is helping retailers large and small navigate the many changes driven by new regulations. More information is available at www.gemoney.com/2010.
WHAT this means for private label card companies like GE Money?
The changes affect all lenders of consumer credit and require banks to comply as scheduled.
This means that some new consumer protections under the CARD Act are already in effect, including the requirement that card companies provide customers with 45-days advance notice and ability to opt out of pricing changes including: interest rate increases; late payment fee; over-the-limit fee; and returned-payment fee.
The rest of the changes take effect in February and August 2010 though many card issuers are already working to comply with new consumer protections. Card companies like GE Money are modifying statements, systems, processes, marketing materials, signage, disclosures and other items to provide accurate information that reflects the new requirements.
HOW retailers can ensure compliance with the new government regulations
GE Money’s new Web-based Business Center enables businesses to manage finance programs, help drive sales and ensure compliance with new mandatory government regulations. Businesses can be confident that all materials and information they offer and access on Business Center is up-to-date and fully compliant.
“The Business Center offers a full suite of tools to help our partners take more control of their financing program to grow their business. The timing of its availability could not be better as, together, we enter into 2010 and the changing regulatory environment. We’re here for the long term and investing to help give dealers/retailers/contractors the tools they need to be successful,” says Pittman. Business Center is available free to businesses that use GE Money finance programs by registering at www.gemoney.com/business.